Taxation and Fairness

I have heard a lot of complaints lately from the news media that while corporate profits and earnings continue to rise unemployment is not improving. Now, I understand that tax hawks have done a great job explaining to us that lower tax equals more investment – but there is simply no evidence that this is correct. Supply-side economics doesn’t work, and never has – seehere, here, and here (gathering additional sources). Now, this is not an attempted justification for tax rates of 80%, but perhaps a more nuisance accounting of our nation’s fiscal situation would be helpful.

Initially, there is no logical reason to think that an actor with more money will lead to an improved economy. (Please point me to any study suggesting otherwise.) Why anyone would ever have believed that supply-side economics has any basis in reality?

Yet for some reason, we believe that an increase in corporate profits or earnings will necessarily result in an increase in wages and/or employment for non-owners. I am baffled. Of course, an increase in profits and earnings could result in increased wages, etc., nevertheless it is not necessarily the case that it will.

In connection with the deficit talks, Republicans appear to have asserted that all new taxes are evil. Unfortunately (for them), the economy and deficit do not agree. Additionally, economists have always argued for taxes to account for our externalities. For example, a gas tax approximating externalities rather than cost of constructing/maintaining federal highways. But I digress. Economists may disagree as to how the government should tax, what money should be spent on, etc. but there is no doubt that Republicans (and to a far lesser extent Democrats) are not basing their decisions on sound economic principals but are instead arguing for lower taxes for lower taxes sake – because certain high income earner want to pay less (and who can blame them).

Perhaps a little more honesty on this point would be in order – Republicans and fiscal conservatives should simply say that people who make more money don’t want to pay for food, shelter, and medical care for the poorest and neediest amongst us. That the needs of those individuals are simply less important than the needs of poor children, single mothers, and seniors. I’m not sure that Democrats care about what is “best” for society, but there is one thing I do know – Republicans decidedly do not care about what is best for society as a whole.

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Saying that “there is one thing I do know – Republicans decidedly do not care about what is best for society as a whole” is both a sign of ignorance and a false understanding of what is “best” for society.

It is just the writer’s definition of “what is best for society”.

And when did anyone, politician or not really care about or understand “fairness”?